How Does NBA Top Shot Work? 20 Facts
How Does NBA Top Shot Work? 20 Facts
You may have heard about it or seen it trending on Twitter; thing is, NBA Top Shot is pretty hot right now as is covered over at runrex.com. But what is it all about and how does it work? Well, this article, with the help of the following 20 facts, will help you answer these two questions and by so doing, give you a better understanding of this new sports collecting craze that has taken the industry by storm.
What is NBA Top Shot?
As is articulated in discussions on the same over at guttulus.com, NBA Top Shot is a blockchain-based platform that allows fans to buy, sell, and trade numbered versions of specific, officially-licensed video highlights called moments.
Who are the brains behind it?
As is outlined over at runrex.com, NBA Top Shots is a joint venture between the National Basketball Association (NBA), the NBA Players Association (NBPA), and Dapper Labs, which began in July of 2019.
What are blockchains?
As explained over at guttulus.com, blockchains are databases of information linked together that can be used to record the ownership or transactions of a product. It can’t be changed and it’s stored in a way so that no one person controls the system, and is transparent to all users. It’s the technology used by popular cryptocurrencies like Bitcoin and Ethereum.
What does this technology have to do with NBA highlights?
Blockchain technology is the technology being used for those who purchase these highlights (moments) and put them into a very secured, encrypted wallet. This is why one of the ways through which you can pay from moments is via cryptocurrencies like Bitcoin and Ethereum.
Can I simply just watch these highlights on YouTube and Twitter?
Well, yes, you can. However, the way this works is that you can own an officially licensed highlight like you would own a trading card, and the fact that some of those highlights might be limited to just a few “printings”, this drives the price up making them very valuable.
Where is the value in that?
As the subject matter experts over at runrex.com point out, there is value in anything that other people value thanks to supply and demand. If there are collectors out there who see a dollar value in a super-rare, officially-licensed highlight of a big-name NBA player that others want, then there is a market for it.
Will you own the rights to the highlights after making a purchase?
According to guttulus.com, the NBA continues to own the rights to these video highlights, but fans can secure a limited-edition, numbered version of specific, officially-licensed plays. Once these assets are in your possession, then you can trade and sell them.
How does it work?
As explained over at runrex.com, the NBA packages the highlights, then Dapper Labs handles the rest. Dapper Labs decides how many of each clip to sell, which will determine how ‘limited’ an edition of each clip will be, and then assigns a number to each clip. This number is key – people are really purchasing the number, not the clip itself.
Once a number has been assigned as mentioned in the previous tip, these clips are then packaged into digital packs, which are listed for somewhere between $9 and $230 depending on the quality of the clips. Once you buy a pack, the cards go into your digital wallet.
What other factors determine the price?
From the previous point, it is clear that one of the factors that determine the price of a digital pack is the quality of the clips. However, other factors that determine card price are the stardom level of the player and the exclusiveness of the card.
How much do they cost?
As is the case with sports cards, there are options for both the budget-conscious and those with a bigger budget. According to the gurus over at guttulus.com, you can buy a pack for as little as $9. Platinum Ultimate and Genesis Ultimate packs, however, are only available through auction and are a lot more expensive.
Can I buy packs now?
If you are wondering how to get in on the action, then it is important to note that all of the packs are currently sold out on the NBA Top Shot website, which is the only place where you can buy, sell, or trade the virtual cards. Keep an eye out for when the next pack drops and make sure you get in the queue as early as possible so that you don’t miss out, according to runrex.com.
How does the buying process work?
Once the packs are available, you will be entered into a queue to buy them. The subject matter experts over at guttulus.com recommend that you get in on the action early enough so that you can get a favorable place in the queue. Usually, people will start to be entered in the queue 15 minutes or so before the expected pack drop. Remember, once the packs are sold out, they are gone indefinitely.
What is to stop someone from holding up the queue?
NBA Top Shot must keep the queue moving so that the process runs smoothly and that people in the queue are served in good time. Therefore, to prevent anyone from holding up the queue, NBA Top Shot gives each person a five-minute limit to finalize their purchase before they lose their spot.
What are the options if I want to get my hands on these moments?
The Top Shot site offers two different ways for those looking to get in on the action. The first route is the one we have already mentioned, and that is buying various “packs” of highlights, which drop at certain times. You must keep an eye out for when the next pack drops as they usually sell out within no time at all. The second option to head over to the Top Shot Marketplace and buy individual highlights offered by other users who are selling them.
How fast is this market growing?
As is revealed in discussions on the same over at runrex.com, this market is growing extremely fast. Five clips have already sold for at least $20,000 (three were LeBron highlights, one Morant, and one Giannis Antetokounmpo). Top Shot is closing in on $20 million in sales, which also gives you an idea of how fast this market is growing.
Where does the majority of the sales figure come from?
Of the $20 million in sales outlined in the previous point, only about $6 million is coming from pack sales. Most of it, about $14 million has been generated on the secondary marketplace, which is where most of the action is taking place with users selling individual highlights to each other as articulated over at guttulus.com.
How do cards increase in value?
The principle of supply and demand is the guiding factor as far as highlights increasing in value goes. For example, the Morant card mentioned earlier was purchased in a pack, then resold in November of last year for $1,999. That owner held onto it until Bales and Jennings bought it for $35,000 as outlined over at runrex.com. This is close to a 17.5x ROI which is a decent amount, to say the least, and shows the potential these highlights are when it comes to increasing in value.
How do you sell Top Shots?
If you are ready to resell or trade a Top Short, then all you have to do is go to your digital highlight reel and select an item to put on the marketplace. If someone is interested, it will sell and you will get your money, as simple as that. The platform, however, takes a cut of sales, just like eBay. This deal is structured in such a way that both Dapper and the NBA get cuts of original sales and deals made on the secondary marketplace.
What does the future hold for Top Shot?
The sports trading card market is worth $5-$6 billion per year according to the CEO of Dapper Labs, who also reckons that Top Shot could gross $1 billion annually, which shows that the future looks bright so far. Dapper Labs also won’t likely stop with the NBA as the CEO, Mr. Gharegozlou, has hinted that his team is working on deals with other leagues which could open it up to the NFL and MLB in the future.